Alistair Booth

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Alistair Booth

Tesla caught the eye of the consumer when they released their Roadster in 2008. The Roadster, a true fully electric super car with a practical driving range, boasts a 0 to 60 mph acceleration time of less than 4 seconds and can go almost 250 miles on a single charge.[i] Tesla, however, has not been able to turn its buzz or technology into exciting growth. In 2010 Tesla reported annual revenues of $116.7 million, only a 4% increase from 2009 and a net loss of $154.3 million in 2010, almost three times the net loss of 2009.[ii] To maintain operations and development of new products and technologies, Tesla has been able to garner modest investment through venture capital, US government loans, a successful IPO, and investment from competitors and suppliers.

Tesla and its investors are eagerly awaiting the launch of its new luxury Model S in 2012. Tesla has already pre-sold more than 3,000 Model S cars and plans to ramp production up to 20,000 cars a year.[iii] At an average sale price over $50,000, the Model S represents a potential $1bn a year or more of revenue for the company. Investors however, have pegged Tesla’s market cap at $2.3bn and still have doubts about Tesla and the potential success of the Model S.